Surcharge legislation on the docket

Surcharge legislation on the docket

Fuel surcharges have become a hot topic as truckload carriers and brokers hit hard by rising diesel prices have looked to pass on the costs. However, some intermediaries have tried to take advantage of the surcharges

Fuel surcharges have become a hot topic as truckload carriers and brokers hit hard by rising diesel prices have looked to pass on the costs. However, some intermediaries have tried to take advantage of the surcharges.

Rep. Peter DeFazio (D-OR) has introduced an amendment to the 2009 Department of Defense Authorization bill (H.R. 5658) aimed at protecting truckers from intermediaries. It stipulates that all surcharges paid by the government are passed to the trucker buying the fuel in all Department of Defense loads.

The amendment states: “In all carriage contracts in which a fuel-related adjustment is provided for, the Secretary of Defense shall require that a motor carrier, broker, or freight forwarder providing or arranging truck transportation or service using fuel for which it does not bear the cost pay to the person who bears the cost of such fuel the amount of all charges that relate to the cost of fuel that were invoiced or otherwise presented to the person responsible directly to the motor carrier, broker, or freight forwarder for payment for the transportation or service.”

DeFazio’s amendment was added to the bill on a voice vote, and was approved by the House by a 383 to 26 vote. The Owner-Operators Independent Drivers Association (OOIDA) praised the measure.

“We are thankful to Congress for making sure valuable taxpayer dollars are spent wisely to support our men and women in uniform and those who support them on the home front,” said OOIDA executive vp Todd Spencer. “The money from fuel surcharges should not go to pad someone’s pocket, but be used properly to support our military actions and efforts.”

The amendment comes on the heels of the TRUCC (Truth in Reliable Understanding of Consumer Costs) Act, which dictates a 100% pass-through of fuel surcharges to whoever buys the fuel on all loads.

The bill would stop brokers and middlemen that charge shippers for fuel costs but do not further pass the costs to the operators who pay for the fuel.

Sen. Olympia Snowe (R-ME) and Sen. Sherrod Brown (D-OH) introduced the TRUCC Act in the Senate last month. DeFazio, Rep. Thomas Petri (R-WI) and Rep. Brad Ellsworth (D-IN) then introduced an identical bill in the House on May 6th.

"In normal circumstances, this seems patently unfair, but in this day of $4.00-plus per gallon diesel fuel, it is unconscionable that a fuel surcharge is being assessed but not passed on to the one actually paying the fuel bill,” Petri said. “I have been told by one of my constituents, who is an independent trucker who will be appearing in bankruptcy court next month, that this inequity contributed to his financial problems. It's not right, and it should be corrected."

“Small business truckers are often at the mercy of freight brokers, logistics intermediaries and larger trucking companies,” Snowe said. “There is currently not a uniform fuel surcharge standard for the trucking industry so fuel surcharges must be negotiated individually leaving shippers and truckers vulnerable to opportunistic intermediaries who are inflating their own coffers at the expense of small business motor carriers.”

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